Bankrate's survey, which examined the five largest banks and the five largest thrifts in each of the top 10 metropolitan markets, shows that the average fee charged for courtesy overdraft is $29.

That average is for the first overdraft.

Banks charge that fee on a "per item" basis, meaning it gets tacked on to each overdraft. Several institutions charge escalating fees with each ensuing overdraft, which can pile up quickly. So, if you overdraw frequently, the average fee you pay could be considerably higher than $29. For instance, Bank of America cuts first-time offenders some slack and charges $20 for the first overdraft; after that the fee rises to $35.

But the costs to consumers don't end there. A handful of surveyed banks also charge another fee every day an account is in negative territory. Some give a grace period, and some stick the customer with a daily fee right away. Corus Bank in Chicago has a five-day grace period and then begins tacking on a $5 charge each day, while Sterling Bank & Trust in San Francisco digs right in and charges customers $10 per day from the get-go.

Many ways to overdraw
Courtesy overdraft typically allows a customer to overdraw their account up to a specific dollar amount based on their account and their relationship with the bank. The overdraft limit is usually in the $100 to $1,000 range, but the bank has no obligation to pay the overdraft. Customers aren't limited to overdrawing their account by check. They can do it through electronic transfers or go overboard at the cash register or the ATM with their debit cards.

Some overdraft programs include the allowed overdraft dollar amount when customers check their balance at the ATM. It's easy to see how a person who has $100 in his or her account could overdraw if he sees an allowed overdraft amount of, say, $200 added to the total balance. They may not understand that taking out more than $100 will put their account in arrears.

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Common sense would dictate that if you're trying to take out more money than is in your account, the ATM or point-of-sale authorization system should either refuse the withdrawal, just as it would with a credit card, or let you know that you'll be overdrawn and you'll incur a fee; but that's not what's happening.

Are you enrolled?
What's also troubling is that most bank customers are automatically enrolled in courtesy overdraft programs without their knowledge. Banks aren't required to send a notice to the customer that they're enrolled in the program unless the bank chooses to promote the program, and most don't. Consumer advocates say these programs are nothing more than high-interest, short-term loans foisted upon unsuspecting customers.

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